Living Up to Technology`s Promise
At first glance, AT&T, Boeing, Cisco and New York Life Insurance don’t have a lot in common. They represent different industries—telecommunications, aerospace and defense, networking and information technology, and insurance, respectively—and their 2008 revenues range from $31 billion to $124 billion.
Despite these differences, the companies are alike in two key ways: They believe in the promise of technology, and they engage in ongoing efforts to fully integrate technology into their enterprises. These companies are leaders in the 2009 Baseline/BTM 500 report, scoring high marks in all four survey areas: governance and organization, strategic investment management, strategy and planning, and strategic enterprise architecture.
(Read “The Value of Convergence”.)
The companies’ CIOs are business leaders as well as technology leaders. They have bridged the divide that often separates the two sides of a company and helped create an environment that is hospitable to business-technology convergence.
Consider the philosophy of Thaddeus Arroyo, CIO of AT&T: “If anyone in our company asks our top executives what our IT resources are for, they will say that it’s all about creating business velocity. We must use the technology to transform our business processes in a way that creates market offerings more quickly, allows us to better serve our customers and delivers the ROI that justifies the investment.”
(Read “AT&T: A Philosophy of Partnership”.)
And Arroyo is not alone. The CIOs of Boeing, Cisco and New York Life have similar views on convergence.
New York Life, for example, has built processes that keep business and technology leaders closely connected, according to CIO Eileen Slevin. The starting point is a business and technology strategy team that maintains a road map for the business. “IT is focused on the business needs of the organization,” she says, “along with the infrastructure and technology that’s needed to support it.”
(Read “New York Life: Insuring Business Success”.)
Cisco’s technology strategy is also implemented according to a road map. “The road map takes into account everything you have to do when you deliver something—from when you acquire it to the point of change management when you implement it,” says CIO Rebecca Jacoby. “We measure ourselves according to business requirements and business results.”
(Read “Cisco: Collaboration Is Key to Business”.)
At Boeing, CIO John Hinshaw took another step on the road to convergence when he became the company’s top technology executive two years ago. “The first thing I did was lay out a new organizational structure that was more aligned to our business structure,” he reports, “and then I found the right people to lead the organization. IT is not just a corporate function. We’re very well integrated with the business.”
(Read “Boeing: Supporting a Global Enterprise”.)
“Very well integrated with the business.” That’s the key to business-technology convergence. With convergence, technology is not isolated from the rest of the company. Instead, it’s at the heart of the business, supporting and enabling all its operations.
In the 2009 Baseline/BTM 500 report, the convergence maturity of U.S. public companies with 2008 revenues of $500 million or more was rated on five levels (from low to high):
Level 1: Initial
Level 2: Repeatable
Level 3: Defined (discernible alignment first occurs)
Level 4: Managed (the threshold of synchronization)
Level 5: Optimizing (convergence).
Of the companies evaluated in the 2009 report, more than half were in Levels 3, 4 and 5. The breakdown follows:
• Level 1: 17 percent are in prealignment.
• Levels 2 to 3: 25 percent are repeatable and approaching alignment.
• Levels 3 to 4: 39 percent are fully in alignment, approaching synchronization.
• Levels 4 to 5: 19 percent are fully synchronized or approaching convergence.
The distribution of companies across the various levels is generally similar to the distribution in our 2008 report, with about 1 percent of the surveyed firms approaching full convergence (Level 5). One major exception is the 10 percent shift of enterprises from Levels 4-5 (29 percent in 2008; 19 percent in 2009) to Levels 3-4 (29 percent in 2008; 39 percent in 2009).
We believe this change is due to two factors: First, the 2009 report is based on four surveys with a total of 40 questions, while the 2008 report had only one 17-question survey. The second factor involves the average number of respondents per company: roughly 3.5 this year, compared with one in 2008. These changes produced a more in-depth, precise look at each firm.
(Read a list of the top 100 companies and The Baseline/BTM 500 List.)
Companies and their executives tasked with achieving business-technology convergence face colossal challenges, but the potential rewards are equally huge: improved employee productivity, greater customer satisfaction and retention, better business performance, increased operational efficiency, a larger market share and a more robust bottom line.
Corporate change is never quick or easy. But, in the case of convergence, it’s crucial.
The majority of firms assessed in the 2009 Baseline/BTM 500 have achieved at least a foundation for business-technology convergence. They focus on the strategic business-oriented management of technology, and exhibit strong capabilities across the four functional areas of the BTM Framework:
• Governance and Organization determines the role of technology in the enterprise and manages technology to meet business goals. This function structures and manages the business-technology organization, manages risk and compliance, and ensures that there is regular communication about the activities of technology throughout the enterprise.
• Strategic Investment Management approves and prioritizes technology investments. This function develops and manages project and asset portfolios, and provides reporting. It establishes and manages business-technology demand and resource requirements, and applies business technology to project execution throughout the implementation life cycle.
• Strategy and Planning articulates required business capabilities and the technology plans to enable them. This function provides a disciplined means of ensuring that budgets reflect and support strategy. It also supports the creation and management of relationships with the partners best suited to an organization’s strategy, and integrates technology assets to ensure consistency with the enterprise’s strategy.
• Strategic Enterprise Architecture describes business strategies, operating models, capabilities and processes in terms actionable for business technology. This function defines the applications and technical infrastructure required to meet enterprise goals and objectives; establishes a set of standard business-technology applications, tools and vendors; and identifies, organizes and manages existing business applications, along with technology assets and projects.—BTM staff
Read more “The Value of Convergence”.